[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Today Lehman Brothers said that it's shutting its subprime-mortgage unit BNC Mortgage LLC and firing 1,200 people, becoming the latest company to stop offering home loans to less-creditworthy borrowers. According to an industry publication Inside B&C Lending, BNC was a top-20 subprime mortgage lender in 2006, originating more than $14 billion worth of home loans.

These 1,200 jobs would go in 23 locations which would cost it about $52m in charges. Lehman said in a statement:

"Market conditions have necessitated a substantial reduction in resources and capacity in the subprime space."

So far more than 50 lenders have already gone bankrupt. Investors in the secondary mortgage market have stopped buying securities backed by subprime loans. A snapshot of how the mortgage jobs are evaporating is shown below:

The melt down of the subprime mortgage businesses has engulfed approximately 47000+ jobs! There might be more layoffs and company closures in the pipe line.

In the economy usually when one sector suffers, there is a domino effect. We observed this phenomenon when the tech bubble burst. Hopefully the situation is better this time with no widespread domino. Else who knows, 2008 might see the US economy battling with recession!

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